Question

The following list gives the balance of paymentsLOADING... account​ information: Increase in foreign holdings of assets in the United States ​ $1,181 Exports of goods 856 Imports of services −256 Net transfers −60 Exports of services 325 Income received on investments 392 Imports of goods −​1,108 Increase in U.S. holdings of assets in foreign countries −​1,040 Income payments on investments −315 Assume the balance on the capital account is zero.

Answer 1

Answer and Explanation:

The computation is shown below

BOT = exports of goods - imports of goods

= (856 - 1108)

= -252

2)Balance on current Account is

= BOT + net transfers + net income from investment

= -183 + (-60) + ( income received - income payments )

= -183 - 60 + 392 - 315

= -166

3) balance on the financial account is

= rise in foreign holding in US - rise in US holdings in foreign

= 1181 - 1040

= 141

4) statistical discrepancy = 25

Since BOP = current Account balance + financial account balance + statistical discrepancy

As BOP total is always zero

So, 0 = -166 + 141 + statistical discrepancy

Therefore

statistical discrepancy = 25

5) BOP = 0